Insider Trading Case: Banned Infosys Employees Allowed To Buy/Sell Shares By Securities and Appellate Tribunal

• Senior officials of Infosys got some relief from the Securities and Appellate Tribunal (SAT) against an interim order by market regulator SEBI in an insider trading case. 
• SAT lifted the restrictions imposed by SEBI on Pranshu Bhutra, Amit Bhutra, Bharath C. Jain and Venkata Subramaniam V. V.

Senior officials of Infosys got some relief from the Securities and Appellate Tribunal (SAT) against an interim order by market regulator SEBI in an insider trading case. SAT lifted the restrictions imposed by SEBI on Pranshu Bhutra, Amit Bhutra, Bharath C. Jain and Venkata Subramaniam V. V.

SEBI prohibited Infosys employees from buying and selling the company’s shares

Bhutra is the senior corporate counsel of Infosys and Venkata Subramaniam is the senior principal, of the corporate accounting group, Infosys. SEBI had prohibited them from buying and selling Infosys shares till further orders. A SEBI order on 15th September last year restrained Infosys employees on allegations of insider trading rule violations

“When only prima facie observations are being made which the appellant has sufficiently explained and discharged his burden we are of the opinion that at this stage debarring a person from accessing the securities market is not justified in the facts of the case,” said a Bench led by Justice Tarun Agarwala, while quashing SEBI’s confirmatory order.

No direct or indirect evidence 

The tribunal said that in the absence of any direct or indirect evidence coming forward at this stage and because the investigation is still continuing, which may take time for issuance of show-cause notice, they are of the opinion that the continuation of the interim order against the appellant is unjustified especially when the appellant has not traded in the scrip nor is there any finding that he is a party to unlawful gain. 

The two partnership entities, Capital One, and Tesora Capital were investigated by SEBI for their trading activity. These entities supposedly traded in the futures and options segment of the Infosys scrip just before the announcement of financial results for the quarter ended June 30, 2020. The information concerning the financial results was unpublished price-sensitive information (UPSI), and the UPSI period was from 29th June 2020 to 15th July 2020, as per SEBI.